Fresh state pension blow for six million
Workers born in the 1970s will have to work longer to get the state pension after the government announced it was bringing forward a planned rise in the pension age by seven years.
Six million people currently aged between 38 and 45 will have to work an extra year, the Work and Pensions Secretary David Gauke told MPS in a surprise announcement.
Workers born in the 1970s will have to work longer to get the state pension after the government announced it was bringing forward a planned rise in the pension age by seven years.
Six million people currently aged between 38 and 45 will have to work an extra year, the Work and Pensions Secretary David Gauke told MPS in a surprise announcement. The state pension age will rise from 67 to 68 from 2037 in order to save £74 billion over the next thirty years.
Mr Gauke told MPS the Government was accepting the recommendation made in a review of the state pension age earlier this year. However, the move was not in the Conservative general election manifesto last month.
The new timetable would scale back the projected increase in pensions spending by 0.4 per cent of GDP in 2039/40 – equivalent to a saving of around £400 per household.
Mr Gauke said: “As the Cridland Review makes clear, the increases in life expectancy are to be celebrated, and I want to make clear that even the timetable for the rise that I’m announcing today, future pensioners can still expect on average more than 22 years in receipt of the state pension.
“But increasing longevity also presents challenges to the Government. There is a balance to be struck between funding of the state pension in years to come whilst also ensuring fairness for future generations of taxpayers.”
But charity Age UK pointed out that his announcement comes days after former government adviser Sir Michael Marmot warned the trend towards longer lives was “pretty close to having ground to a halt” since 2010, after rising constantly since the Second World War.
The charity’s director Caroline Abrahams said the government was “picking the pockets” of workers in their forties. TUC general secretary Frances O’grady said the Government risked creating “second-class citizens” by hiking the pension age.
“In large parts of the country, the state pension age will be higher than healthy life expectancy,” she said.
Unite assistant general secretary Gail Cartmail accused the government of delivering a “kick in the teeth” to workers, while GMB national pensions organiser Keir Greenaway said ministers were “clobbering six million people”.
Downing Street rejected suggestions that the pensions announcement had been timed to coincide with the publication of BBC salary details in an attempt to “bury” the news.
Labour’s shadow Work and Pensions Secretary Debbie Abrahams said the move was an “astonishing continuation of austerity” that would affect 34 million workers.
News that the pensionable age is to be raised from 67 to 68 from 2037 came as a bolt from the blue.
We understand there is going to be a greater burden on government funds in the future as the population demographic changes, but the timing is unfortunate. Just this week a report from University College London stated that life expectancy has plateaued - we are no longer seeing the constant creep upwards.
Equally, life expectancy is a postcode lottery. Statistics from the National Records of Scotland published last year put life expectancy at 77.1 years for baby boys born north of the Border in the past three years, and 81.1 years for girls.
This was two years lower than the UK average for men, and 1.7 years lower than the female average. In Glasgow, meanwhile, some estimates have put the average age people will die at just 71 and a half.
With this in mind, any plans to raise the pension age to 69 or 70 should be put on hold until it can be proved that life expectancy is continuing to rise beyond its current level. Otherwise, a further push just appears to be an unnecessary extra take from the public.